Hoshino Resorts, known for luxury, moves into midrange urban market with OMO brand

Oct. 06--Hoshino Resorts Inc., known for its luxury hotels and traditional lodgings blending Japanese aesthetics and contemporary design, is making a foray into the urban hotel market with a new brand targeting tourists.

Yoshiharu Hoshino, a fourth-generation hotelier and the chief executive officer of the hotel operator, announced Thursday the launch of the company's fourth brand, OMO, and said two new hotels under the brand will be opening next spring with more to come.

"We discovered that many business hotel customers are actually using them for tourism purposes," Hoshino said at a news conference, noting the company plans to service that market.

"Staying in business hotels can be rather dull. That's why we're suggesting a new city hotel brand that will enhance the travel experience," he said.

The company has been refurbishing the Asahikawa Grand Hotel in Hokkaido that was acquired last year, setting up a committee to review its operation and to seek a new business model focusing on each customer's experience by actively introducing guests to local eateries, bars and other attractions while providing quality in-house services.

The Asahikawa hotel has been renamed Hoshino Resort OMO7, with the number reflecting the grade of the accommodation based on a 10-point scale. Another hotel will open near Tokyo's Otsuka station called Hoshino Resort OMO5. The two hotels will start accepting guests from next spring, while another is planned near Osaka's Shin-Imamiya Station in the downtown area.

The announcement marks a new chapter for Hoshino Resorts as it seeks further growth by capitalizing on the nation's tourism boom and an accommodation crunch, especially in urban centers.

To date, Hoshino Resorts has operated high-end hotels and ryokans, traditional-style Japanese inns, in rural, scenic locations under its flagship Hoshinoya brand, the hot-spring-focused Kai brand, and the western resort-type Risonare brand. It currently operates 37 resorts -- 35 in Japan and two overseas.

The OMO brand will primarily operate in cities, targeting travelers looking for city hotels as a base for local tourism.

According to the Japan Tourism Agency, around 60 percent of hotel guests last year -- both Japanese and foreign -- stayed in business or city hotels. That number is expected to increase as the number of tourists grow. Japan saw 24 million visitors last year, and the government wants that number to increase to 40 million by 2020, when Tokyo will host the Olympic Games.

The family business opened its first hot-spring inn in Karuizawa, Nagano Prefecture, in 1914. Hoshino himself took over in 1991 and succeeded in expanding the brand by offering ecologically-minded, contemporary-style upscale ryokans and hotels.

Last year, the resort operator opened Hoshinoya Tokyo, a luxury hotel in the Otemachi business district, and this year opened the Hoshinoya Bali resort on the Indonesian island of Bali.